This behavior appears to be built into the core of qpsmtpd - if you want it fixed permanently you'll need to pursue the issue upstream with qpsmtpd, then wait (possibly a long time) for the changes to migrate down into SME server.
You may be able to change this behavior by modifying /usr/lib/perl5/site_perl/Qpsmtpd/SMTP.pm (at line #680) as follows:cd /usr/lib/perl5/site_perl/Qpsmtpd
mv SMTP.pm SMTP.pm.org.$$
sed s~smtp-auth\ username\ \$self-\>\{_auth_user\}~smtp-auth\ valid-username~ SMTP.pm.org.$$ > SMTP.pm
This will:
1) Create a backup of SMTP.pm named SMTP.pm.org.#####
2) find the line that says
$authheader = "(smtp-auth username $self->{_auth_user}, mechanism $self->{_auth_mechanism})\n";
and replace it with
$authheader = "(smtp-auth valid-username, mechanism $self->{_auth_mechanism})\n";
If you have any trouble, you will need to manually delete the modified SMTP.pm, then copy or rename the backup.
Caveats:
a) I have little to no idea if this will work.
b) These changes will revert (that is, disappear) any time there is an update to qpsmtpd.noarch / qpsmtpd-0.40-1.11.el4.sme.